The case of eggs for 17 UAH for the Armed Forces of Ukraine: NABU exposed the embezzlement of over 733 million UAH and announced suspicions

Law enforcement officers uncovered a scheme to embezzle public funds during the Ministry of Defenseʼs procurement of products for the Armed Forces of Ukraine.

This was reported by the National Anti-Corruption Bureau (NABU).

The agency does not specify the names of the defendants, but ZN.UA, whose journalists were the first to write about this case, says that we are talking about:

• former head of the Ministry of Defense Department for material support of the Armed Forces of Ukraine Bohdan Khmelnytskyi;
• the owner of related supplier companies Tetyana Hlynyana.

Suspicions were also announced against two heads of supplier companies and an individual — their names are unknown. ZN.UA writes that NABU is also investigating the role of former Deputy Defense Minister Vyacheslav Shapovalov and former Defense Minister Oleksiy Reznikov.

The case is being investigated under articles of embezzlement, attempted embezzlement, and money laundering.

According to the investigation, during 2022-2023, the army was supplied with food through the purchase of so-called food kits. This provided the opportunity to order products according to an approved catalog, which included 409 items. The most commonly used, such as vegetables, cereals, meat, water, made up only 10% of the assortment. The rest, such as spices, gelatin or berries, were ordered rarely or never.

The price of the set was formed taking into account all the items in the catalog and was their average cost. This allowed suppliers to manipulate prices: to overcharge them for popular products and undercharge them for little-used products or those that could not be ordered due to seasonality of supply (cherries or apricots in winter). That is, at first glance, there were no violations, and the price of the set did not change. However, potatoes, which were supplied in thousands of tons, were sold at a high price, and seasonal berries and fruits, which were almost never ordered, cost a penny.

As a result of such fraud, during August — December 2022, two supplier companies controlled by the same owner illegally received excess profits in the amount of more than UAH 733 million.

Some of these funds were later withdrawn under the guise of dividend payments and repayment of financial assistance to related companies. This money could, in particular, have been used by the owner of the companies to purchase hotels in Croatia and other real estate.

The entrepreneur was assisted by an official from the Ministry of Defense of Ukraine, who "did not notice" price anomalies in the catalog when signing the contracts.

After the start of the pre-trial investigation in January 2023 and the dissemination of relevant information in the media, in particular regarding the purchase of eggs at UAH 17 per piece, the accomplices of the deal reduced the prices of 11 of the most popular products. This prevented the embezzlement of budget funds in the amount of UAH 788 million.

• In early January 2023, a scandal erupted around the Ministry of Defense due to the procurement of products at allegedly several times inflated prices (in particular, eggs at 17 hryvnias per one). Against this background, the Ministry of Defense decided to publish information about procurement contracts on its own website, as well as compare prices with market prices.
• At the end of January, the Deputy Defense Minister Vyacheslav Shapovalov, who was responsible for the logistics of the Armed Forces of Ukraine, resigned. It later became known that he, along with Bohdan Khmelnytskyi, was involved in a case of embezzlement of UAH 1 billion from the budget.
• Three officials of the Ministry of Defense have come under suspicion due to procurement for the army, and the department has updated its personnel.

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